Description
Where the guarantor of a company loan from a bank was also the company's main shareholder and sole director and on the facts did not believe the audited accounts, the fact that they were negligently prepared and grossly overstated the company's profits and the company was subsequently liquidated did not allow the guarantor to recover damages. On the evidence the auditor owed no duty of care to the guarantor because even those it was very probably that there might be a guarantor the auditor did not specifically that the identity of the guarantor nor had the guarantor sought advice from the auditor and any loss was not recoverable because under the principle of reflective loss it fell outside the scope of duty.
